Gjensidigestiftelsen screens all the underlying holdings in MSCI’s ESG Manager portal. We have developed a factor-list based on our responsible investment strategy and what we find to be our highest priority when evaluating funds’ ESG performance. This factor-list is used in every screen so that we can track historical performance and if the funds we are invested in are making progress. When new trends and parameters develop, these are added to the factor-list so that we can start the process of measuring these whilst keeping the existing framework of the screen.
We find that a screening approach allows us to quickly filter down our many investments and look more closely at the companies, and the funds these investments are in, that receives a critic worthy score. Using the screening tools also allow us to view many aspects of the underlying holdings and this makes it easier for us to classify the companies in our portfolio in more detail. The classifications help the investment team to adjust their focus as this gives us a clearer view of where we are more likely to find ESG concerns in the future as well as the possibility of incidents. The choice of ESG integration is financially motivated. As a long term asset owner, we believe that sustainable value creation will yield superior results and minimize downside risk.
Screening all underlying holdings also gives us the opportunity to have detailed conversations with fund managers as we are able to bring specific business cases up in calls and meetings. Understanding how fund managers handle these specific cases helps us better understand their ESG approach, how this works off paper and how this align with Gjensidigestiftelsens responsible investment strategy.
In addition to screening on ESG performance, Gjensidigestiftelsen has an overall integration investment strategy. Although we don’t have an exclusion list and have not excluded companies or funds solely for ESG reasons, there are certain sectors and involvements the foundation would like to avoid. Funds involved in, heavily invested in such sectors or with investments in a number of companies with involvements viewed as unsustainable and/or unethical, could eventually find themselves to be removed from our investment portfolio. Our criteria are based on several known international standards and guidelines, as for example the United Nations Global Compact, OECD Guidelines for Multinational Enterprises and United Nations Guiding Principles on Business and Human Rights as well as the United Nations Principles for Responsible Investment. Gjensidigestiftelsens mission is also reflected heavily.